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Grading Performance Reporting Solutions

Doug Fritz and Paul Boscacci, December 11, 2019


The following article is by Doug Fritz and Paul Boscacci of F2 Strategy, a consulting organization that helps HNW and UHNW firms improve their technical capabilities across the entire client and advisor experience. It is part of a series of articles drilling into the details of how wealth managers use technology and how they can improve their approach.

The appetite to access current data is insatiable. Use of the internet and particularly mobile devices to access information continues to surge. Providing online access to data is not an option, it’s a necessity. Portal capabilities should include:

-- Curated content – Ability to create custom content and to select what content to share with each client; 
-- Engagement – Ability to select custom date ranges, drill-down to greater levels of detail and export data; 
-- Visualization – Elegant graphics and charts that tell the ‘story’ of the portfolio performance at a glance; and 
-- File sharing – Ability to share reports and documents in a secure environment.

Performance reporting isn’t a stand-alone solution but rather an integral component of a technology ecosystem.  
-- Best-in-class solutions – Ability to seamlessly integrate with the most popular and capable CRM, planning, accounting, and trading/rebalancing solutions; and 
-- Proprietary systems – Ability to integrate external data and proprietary systems.

The level of service each provider provides is a differentiator. Service should be continuous from implementation, adoption through ongoing support and education. The service offering should include:

-- Experienced resources to lead conversion from legacy systems (including historical data conversion); 
-- Ability to develop operational workflows to ensure data integrity and to support user satisfaction and adoption; 
-- Ability to address routine issues and questions quickly and accurately; and 
-- Ability to provide ongoing education and training for new users and to support new functionality.

How reliable is the service provider you are/intend to work with?  Many of the more modern providers have limited access to capital and may be relying on unrealistic growth projections to fund their existence. A prolonged market correction may have serious consequences for many of these firms. A best in class firm should have: 

-- Cadence of innovation – Firms need to fund their own progression and not rely on their clients to pay for incremental changes;   
-- Client/vendor partnership – Best in class firms will have a who’s-who of happy clients who are willing to act as ambassadors for them;  
-- Financial stability – Especially critical going into 2020 (and a possible downturn) to always know who is funding a firm and what they intend to (or have shown a track record for) do with the firm in the coming years; and
-- Well-federated knowledge base - Many firms (even those with hundreds of employees) may have only one or two experts who really know how the tools work. Ensuring that these employees are well-paid and incentivized to remain is critical. 

Closing thoughts 
In the end, “high” marks are incredibly subjective and rely on unique perspectives and objectives. What features and capabilities that are critical to some may not be important to others. Some questions that may help you to shape your decision:

-- What types of investments need to be covered? (liquid, illiquid, unique, derivatives)
-- What is your investment thesis? (asset allocation, security selection, risk-mitigation, tax-optimization, wealth preservation); 
-- Who are your clients? (sophisticated investors, entrepreneurs, endowments)
-- What types of entities do you need to support? (individuals, revocable trusts, irrevocable family-limited partnerships); and
-- What integrations are important (planning, CRM, trading/rebalancing, general ledger accounting, external data).

Ultimately the decision on which solution to adopt will be predicated on the criteria that are most important to you and your firm. 

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